Fed steer and hay markets update

A number of factors have been affecting recent fed steer and hay markets. Jason Wood, provincial livestock market analyst with Alberta Agriculture and Forestry, has an update.
Wood says that the Canfax reported price for Alberta fed, or slaughter, steers averaged just over $151 per cwt for the week ending February 8, 2019. That price is down $9 per cwt - or about $121 for a 1,350 lb. steer - since the start of year.

“A number of market factors are at play, including seasonally slower beef demand and reports of an estimated five per cent decline in year-over-year U.S. beef exports in January.”

He notes that until recently, the mild winter had meant good feeding gains. “Steer carcass weights were 937 lbs. for the week ending February 8, 2019, up 35 lbs. from a year ago.”

“We have also seen the fed steer basis weaken this year with the cash-to-cash nearly $15 per cwt under last week,” adds Wood. “Looking back to 2018, the cash-to-cash basis was nearly $5 per cwt over for the same week.”

“Looking ahead, prices are expected to stabilize and then start to improve as we move towards spring and see beef demand rebuild and supplies start to tighten,” adds Wood. “Currently, the estimated Alberta projected futures price for fed steers works out to just under $170 per cwt for May, then we will see softer prices in the high $140s into the fall.”

He says that year-over-year, Canadian slaughter and cutout has increased eight per cent with heifer and cow slaughter increasing 17 per cent and seven per cent respectively in 2019.

“The average Canadian beef cutout value has strengthened about 10 per cent since the start of the year with the average year to date price six per cent higher than a year ago.”

Looking at the hay market, Wood says that the average provincial hay price in January was $153 per ton or just over 7.6 cents per lb. based on a 50 per cent alfalfa mix. “The January price is six per cent higher than a year ago and 37 per cent higher than the five-year average.”

He adds that this price is an average of all qualities. “A recent look at market offers for good mixed hay showed prices in the $200 to 225 per ton range and up.”

Prices in the fourth quarter of 2018 differed from region to region in the province, explains Wood. “Grass and alfalfa hay were reported lower in price in the northern Alberta – dependent on quality. Grass hay prices were reported from just under 6 cents per lb. in the north to around 10.5 cents per lb. in southern Alberta. Alfalfa hay prices ranged from just under 7 cents per lb. in the north to 11 cents per lb. in the south.”